Schobinger v. Twitter, Inc.

— 1 — — 2 — — 3 — 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA — 6 — 7 MARK SCHOBINGER, Case No. 23-cv-03007-VC (DMR) 8 Plaintiff, ORDER ON JOINT DISCOVERY 9 v. LETTER 10 TWITTER, INC., et al., Re: Dkt. No. 111 11 Defendants. 12 Plaintiff Mark Schobinger and Defendant X Corp. (“Twitter”) filed a joint discovery letter 13 on December 9, 2024. [Docket No. 111 (“JDL”).] Schobinger seeks to compel (1) further 14 responses to Request for Production (“RFP”) 2 and 6, and (2) the deposition of Mason Eaves. 15 Twitter opposes. This dispute can be decided without oral argument. Civ. L.R. 7-1(b). 16 I. BACKGROUND 17 Schobinger made class-wide claims that Twitter agreed to pay its employees a portion of 18 the bonus contemplated by the 2022 Performance Bonus Plan, only to renege on that promise. 19 [Docket No. 43 (First Amended Complaint).] On October 16, 2024, the Honorable Vince 20 Chhabria denied class certification, finding that Schobinger was not an adequate class 21 representative in light of the particular weakness of his individual claim. [Docket No. 101 (Cert. 22 Denial).] The court cited facts revealed in discovery that Schobinger repeatedly recommended to 23 Twitter management not to pay the bonus and asserted that paying the bonus was discretionary 24 under the bonus plan. Id. at 1-2. The court observed: “At his deposition, Schobinger offered a 25 convoluted explanation for how he could possibly have believed he was entitled to the bonus 26 while simultaneously advocating that the company not pay it. It seems likely that Schobinger’s 27 explanation is untrue.” Id. at 2. At the October 3, 2024 class certification hearing, the court 1 August of ‘22. [He] recommended several times after that that the company should not pay the 2 bonus, and now [he] is suing claiming that the company breached the May-August contract [by 3 not giving] him the bonus.” [Docket No. 98 (Transcript) at 6-7.] These facts “strongly indicate[] 4 that [Schobinger] has no breach of contract claim; that he is going to lose.” Id. at 4. 5 To be clear, Judge Chhabria has not ruled on the merits of the case. However, as discussed 6 below, his assessment bears on the proportionality of the disputed discovery under Federal Rule of 7 Civil Procedure 26. 8 II. LEGAL STANDARDS 9 Federal Rule of Civil Procedure 26 defines the scope of discovery: 10 Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the 11 needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to 12 relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense 13 of the proposed discovery outweighs its likely benefit. 14 Fed. R. Civ. P. 26(b)(1). 15 III. DISCUSSION 16 A. RFP 2 17 RFP 2 requests “copies of all emails, Slack messages, and other communications by and 18 among Twitter management personnel (including, but not limited to, Ned Segal and Elon Musk) 19 regarding paying employees an annual bonus for 2022.” JDL Ex. A. Schobinger argues this 20 discovery is relevant “to show that Twitter management was well aware that [the] promise had 21 been made—and to learn what they said amongst themselves in deciding not to pay it.” JDL 2. 22 Twitter responds that “‘internal,’ non-employee facing communications” are irrelevant to 23 Schobinger’s claims, “which are based exclusively upon alleged statements the Company made to 24 employees.” JDL 4. Twitter therefore agreed to produce only “non-privileged communications 25 sent to or from Plaintiff’s email address and Slack address relating to paying employees an annual 26 bonus for 2022,” and represents it also produced “all of the communications that were made to 27 employees” regarding the 2022 bonus. JDL 4, fn. 6; Ex. A. Twitter states that the request for 1 argues that even if the discovery were relevant, it would be an “expensive, unduly burdensome, 2 overbroad and redundant search” that is not proportional to the needs of the case, especially in 3 light of the weakness of Schobinger’s claim. JDL 4. 4 To be discoverable, the requested materials must be both “relevant to any party’s claim or 5 defense and proportional to the needs of the case.” Fed. R. Civ. P. 26(b)(1). The disputed 6 discovery is arguably relevant. Twitter is correct that the alleged contract or promise would be in 7 the form of communications made to employees, but management communications might contain 8 corroborating evidence of the existence of the contract as well as its breach. The problem is that 9 RFP 2 is not proportional. Among other things, Rule 26(b)(1) requires consideration of “the 10 importance of the discovery in resolving the issues, and whether the burden or expense of the 11 proposed discovery outweighs its likely benefits.” Here, Schobinger’s individual claims are weak 12 while the scope of RFP 2 is broad. Schobinger’s request encompasses “all communications by 13 and among Twitter management personnel” about the subject matter, without defining that 14 amorphous and potentially large group. The court denied class certification two months before the 15 JDL was filed. Schobinger could have addressed proportionality by refining his request during the 16 required meet and confer process. Instead, he has doubled down, and fails to identify any 17 proposed compromise even though it is required by the court’s standing order. This has the feel of 18 a last-ditch fishing expedition, the burden of which outweighs the likely benefit. RFP 2 is not 19 proportional to the needs of the case, and Twitter need not produce responsive documents beyond 20 what it has already agreed to provide. 21 B. RFP 6 22 RFP 6 seeks “copies of all financial records and other documents regarding the accrual of 23 funds by Twitter towards the payment of employees’ bonuses during the period of January 2022 24 through June 2023.” JDL Ex. A. As a compromise, Twitter offered to stipulate to facts about the 25 funds accrued for paying the employee bonuses in 2022. JDL 3. Schobinger rejected the offer, 26 arguing he wants “the actual documents showing that the accrual was made, showing who those 27 documents were shown to, what discussion there was about it, etc. . . . [S]uch documents may be 1 light on the discussions and thinking surrounding the company’s ultimate decision not to pay the 2 bonus.” Id. Once again, Schobinger offers no compromise, even though his request broadly seeks 3 “all financial records and other documents” regarding the accrual of funds to pay bonuses in the 4 disputed time frame. 5 Twitter responds that it already produced all documents provided to employees regarding 6 the accrual, such as a company-wide email stating the bonus pool accrual percentage. JDL 5. 7 Twitter also produced Compensation Committee minutes and communications regarding the 8 accrual. Id. It argues that the fact of the accrual is not in dispute because Twitter does not contest 9 it and because it has no impact on Schobinger’s claims. According to Twitter, the accrual is 10 merely an “accounting accrual,” not a “legal obligation,” and is not relevant to the existence of a 11 contract or Twitter’s breach. Id. Twitter also argues that producing the requested documents 12 would be unduly burdensome because they contain “highly confidential financial information 13 having nothing to do with this case.” Id. 14 Again, considering the weakness of Plaintiff’s remaining individual claims and his 15 apparent refusal to tailor his broad request, a further response to RFP 6 is not proportional to the 16 needs of the case. See Fed. R. Civ. P. 26(b)(1). However, the parties shall promptly meet and 17 confer to reach a stipulation on the key facts regarding the accrual of funds toward payment of a 18 2022 bonus. 19 C. Deposition of Mason Eaves 20 Schobinger noticed the deposition of Mason Eaves, Twitter’s Director of Technical 21 Accounting. JDL Ex. B. Eaves was identified in Twitter’s interrogatory responses as someone 22 with “knowledge related to, among other things, the terms of the 2022 Global Discretionary 23 Performance Bonus Plan, and the accounting accrual related to the 2022 Global Discretionary 24 Performance Bonus Plan.” JDL Ex. C. Twitter objects on the basis that Ned Segal, former 25 Twitter CFO, had knowledge about the same subjects and was already deposed. JDL 5. 26 “A court can limit discovery if it determines, among other things, that the discovery is: (1) 27 unreasonably cumulative or duplicative; (2) obtainable from another source that is more 1 discovery outweighs its likely benefit.” Mailhoit v. Home Depot U.S.A., Inc., 285 F.R.D. 566 , 571 2 (C.D. Cal. 2012) (quoting Favale v. Roman Catholic Diocese of Bridgeport, 235 F.R.D. 553 , 558 3 (D. Conn. 2006)). Twitter argues that a deposition of Eaves would be cumulative and irrelevant 4 because Schobinger already deposed Segal. However, Schobinger points out that Segal had been 5 terminated by the time the bonus was due to be paid, while Eaves was still working for Twitter. 6 JDL 3. As such, it is reasonable to expect that Eaves may have different knowledge about the 7 accrual and the decision not to pay the bonus. 8 Balancing the proportionality considerations, Schobinger may take a three-hour deposition 9 of Mason Eaves. — 10 — 11 IT IS SO ORDERED. 12 Dated: January 9, 2025 13 ______________________________________ Donna M. Ryu — 14 — Chief Magistrate Judge — 15 — — 16 — — 17 — — 18 — — 19 — — 20 — — 21 — — 22 — — 23 — — 24 — — 25 — — 26 — — 27 —